UPL (UPL) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue was ₹9,067 crore, up 1% year-over-year, driven by 16% volume growth despite a 14% price decline and 1% negative FX impact.

• EBITDA declined 28% year-over-year to ₹1,145 crore, with margin at 12.6% versus 17.8% last year.

• Net loss for the quarter was ₹965 crore, compared to a net profit of ₹31 crore in Q1 FY24.

• Strong volume recoveries were seen across all geographies, but pricing pressure persisted.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, were approved by the Board and reviewed by the Audit Committee.

Financial highlights

• Contribution margin declined by 620 bps to 39.5% year-over-year due to price declines, higher freight, and high-cost inventory liquidation.

• Net working capital improved by one day versus a 14-day increase last year; net working capital days at 124.

• Net debt stood at $3.3 billion as of June 2024, up $105 million year-over-year.

• Average cost of debt rose to 7.5% from 5.5%-6% last year.

• Basic and diluted EPS for the quarter were both negative at ₹(6.02).

Outlook and guidance

• Full-year FY25 revenue growth expected at 4%-8%, driven by volume and EBITDA growth of over 50% versus FY24.

• Cash flow from operations guidance maintained at $300 million-$400 million, excluding rights issue proceeds.

• Margins expected to normalize and improve in H2 as high-cost inventory is liquidated and pricing stabilizes.

• The Board approved a fund-raising proposal of up to ₹4,200 crore via a rights issue, subject to regulatory approvals.

• Wet season production and good monsoon in India could aid recovery in Advanta segment in H2.